TSP Market Summary: Week of November 12, 2016
Key Takeaways
- Markets reversed 800-point drop to gain 300+ points after Trump election surprise
- Rising interest rates favor banking sectors while pressuring overseas and precious metals
- S&P 500 breakout above 2043 resistance may signal move toward historic highs
Recommended Allocation (Moderate Profile)
This is our historical recommendation from this date. For current recommendations, subscribe.
| G Fund | F Fund | C Fund | S Fund | I Fund |
|---|---|---|---|---|
| 25% | 0% | 25% | 35% | 15% |
One of my coworkers has an "ETU" license plate for “Expect The Unexpected”. Market pundits expected a market drop if Trump was elected, and at 0300 on Wednesday, Dow futures were down 800 points. What we didn’t expect was that the market would reverse itself over the next 12 hours and gain back those 800 points, plus 300 more. Another key word this week is “Transition” as we are seeing a major market rotation based on the expected policies of the Trump presidency. Interest rates are rising which is favorable for the banking and financial sectors. Overseas funds are now coming under pressure. Precious metal funds have completely reversed course after an outstanding first half of the year. Finally, the last key word for this week is “Breakout”. In the past, you’ve heard me discuss how we’ve been stuck around that 2043 level (+ or -) on the S&P 500 for almost two years now. Maybe this will be the catalyst that breaks us above the 2200 level and on to new historic highs. As such, we’re recommending a 25 percent increase in the equity funds (C/S/I) and a reduction in the bond fund (F) to zero.